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Chico's FAS, Inc. Reports a 47% Increase in Second Quarter Earnings Per Share of $0.25 vs. $0.17

08/17/2011
Net sales increased 18.5% to $551.4 million with comparable sales increasing 12.8%

FORT MYERS, Fla., Aug. 17, 2011 /PRNewswire via COMTEX/ --

Chico's FAS, Inc. (NYSE: CHS) today announced its financial results for the fiscal 2011 second quarter and six months ended July 30, 2011.

 

(Logo: http://photos.prnewswire.com/prnh/20091112/FL09527LOGO )

Net Income and Earnings per Share

The Company reported an increase of 47% in earnings per share with net income totaling $43.4 million, or $0.25 per diluted share for the second quarter compared to net income of $30.5 million, or $0.17 per diluted share for the same period last year.

For the six months ended July 30, 2011, the Company reported an increase of 38% in earnings per share with net income totaling $89.3 million or $0.51 per diluted share, compared to net income of $65.9 million, or $0.37 per diluted share reported for the same period last year.

Net Sales

Net sales for the quarter increased 18.5% to $551.4 million from $465.4 million in last year's second quarter. Consolidated comparable sales increased 12.8% for the quarter following a 7.6% increase for the same period last year reflecting our compelling fashion offering and effective merchandising and marketing. The Chico's/Soma Intimates brands' comparable sales increased 11.9% following a 5.5% increase for the same period last year, and the White House | Black Market ("WH|BM") brand's comparable sales increased 14.9% following a 12.5% increase for the same period last year.

Gross Margin

Gross margin for the second quarter of $309.3 million, or 56.1% of net sales, represents a 40 basis point improvement over last year's second quarter driven by increased full-price selling partially offset by successful planned promotional activity.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the second quarter of $240.4 million, or 43.6% of net sales, represents an improvement of 190 basis point over last year's second quarter due to the sales leverage impact on store personnel and occupancy costs, slightly offset by higher performance based compensation.

Inventories

For the total company, weeks of inventory supply on hand decreased approximately 4% compared to the prior year, reflecting initiatives to drive inventory productivity. While in-store inventories increased approximately $16.5 million over last year, or 8% per selling square foot, this increase is consistent with our mix of new store growth and sales trends. The balance of our inventories increased primarily due to timing of deliveries, planned net new third quarter store openings and our expanding DTC channel.

Share Repurchase Program

During the second quarter of 2011, the Company repurchased 4.3 million shares for $61.2 million and has $84.2 million remaining under the original $200 million authorization approved by the Board of Directors in August 2010.

ABOUT CHICO'S FAS, INC.

The Company is a women's specialty retailer of private branded, sophisticated, casual-to-dressy clothing, intimates, complementary accessories, and other non-clothing gift items. The Company operates 1,221 specialty stores, including stores in 48 states, the District of Columbia, the U.S. Virgin Islands and Puerto Rico.

The Chico's brand currently operates 598 boutiques and 78 outlet stores, publishes a catalog during key shopping periods throughout the year, and conducts e-commerce at www.chicos.com.

White House | Black Market currently operates 354 boutiques and 25 outlet stores, publishes a catalog highlighting its latest fashions and conducts e-commerce at www.whbm.com.

Soma Intimates is the Company's developing concept with 150 boutiques and 16 outlet stores today. Soma Intimates also publishes a catalog for its customers and conducts e-commerce at www.soma.com.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 Certain statements contained herein, including without limitation, statements addressing the beliefs, plans, objectives, estimates or expectations of the Company or future results or events constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements involve known or unknown risks, including, but not limited to, general economic and business conditions, and conditions in the specialty retail industry. There can be no assurance that the actual future results, performance, or achievements expressed or implied by such forward-looking statements will occur. Users of forward-looking statements are encouraged to review the Company's latest annual report on Form 10-K, its filings on Form 10-Q, management's discussion and analysis in the Company's latest annual report to stockholders, the Company's filings on Form 8-K, and other federal securities law filings for a description of other important factors that may affect the Company's business, results of operations and financial condition. The Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that projected results expressed or implied in such statements will not be realized.

For more detailed information on Chico's FAS, Inc., please go to our corporate website, www.chicosfas.com.

Executive Contact:Robert C. Atkinson Vice President-Investor Relations Chico's FAS, Inc. (239) 274-4199

(Financial Tables Follow)

Chico's FAS, Inc.

Consolidated Statements of Income

(Unaudited)

(in thousands, except per share amounts)




Twenty-Six Weeks Ended




Thirteen Weeks Ended



July 30, 2011


July 31, 2010


July 30, 2011


July 31, 2010


















Amount


% of Sales


Amount


% of Sales


Amount


% of Sales


Amount


% of Sales

Net Sales:
















Chico's/Soma Intimates

$ 749,258


68.8


$ 656,360


69.3


$374,324


67.9


$319,660


68.7

White House | Black Market

339,349


31.2


290,599


30.7


177,125


32.1


145,711


31.3

Total net sales

1,088,607


100.0


946,959


100.0


551,449


100.0


465,371


100.0

















Cost of goods sold

461,617


42.4


406,173


42.9


242,122


43.9


206,164


44.3

Gross margin

626,990


57.6


540,786


57.1


309,327


56.1


259,207


55.7

















Selling, general and administrative expenses:
















Store and direct operating expenses

364,977


33.5


333,501


35.2


183,461


33.3


164,853


35.4

Marketing

51,971


4.8


47,091


5.0


21,073


3.8


18,011


3.9

National Store Support Center

68,253


6.3


57,782


6.1


35,822


6.5


28,982


6.2

Total selling, general and

administrative expenses

485,201


44.6


438,374


46.3


240,356


43.6


211,846


45.5

















Income from operations

141,789


13.0


102,412


10.8


68,971


12.5


47,361


10.2

















Interest income, net

820


0.1


844


0.1


420


0.1


394


0.0

Income before income taxes

142,609


13.1


103,256


10.9


69,391


12.6


47,755


10.2

















Income tax provision

53,300


4.9


37,400


3.9


26,000


4.7


17,300


3.7

Net income

$ 89,309


8.2


$ 65,856


7.0


$ 43,391


7.9


$ 30,455


6.5


















Per share data:

















Net income per common share-basic

$ 0.51




$ 0.37




$ 0.25




$ 0.17



















Net income per common & common equivalent share-diluted

$ 0.51




$ 0.37




$ 0.25




$ 0.17



















Weighted average common shares

outstanding-basic

173,082




177,417




171,282




177,499



















Weighted average common & common

equivalent shares outstanding-diluted

174,298




178,807




172,495




178,774



















Dividends declared per share

$ 0.15




$ 0.12




$ 0.05




$ 0.04




Chico's FAS, Inc.

Consolidated Balance Sheets

(in thousands)



July 30,


January 29,


July 31,


2011


2011


2010


(Unaudited)




(Unaudited)

ASSETS

Current Assets:






Cash and cash equivalents

$ 56,109


$ 14,695


$ 17,559

Marketable securities, at fair value

448,211


534,019


469,829

Receivables

5,619


3,845


7,483

Income tax receivable

11,303


6,565


657

Inventories

190,745


159,814


146,899

Prepaid expenses

31,184


26,851


27,018

Deferred taxes

9,084


10,976


9,823

Total Current Assets

752,255


756,765


679,268







Property and Equipment:






Land and land improvements

43,314


42,468


42,080

Building and building improvements

92,864


89,328


85,628

Equipment, furniture and fixtures

463,130


428,217


406,682

Leasehold improvements

436,432


426,141


418,585

Total Property and Equipment

1,035,740


986,154


952,975

Less accumulated depreciation and amortization

(510,958)


(468,777)


(425,498)

Property and Equipment, Net

524,782


517,377


527,477







Other Assets:






Goodwill

96,774


96,774


96,774

Other intangible assets

38,930


38,930


38,930

Deferred taxes

-


964


39,597

Other assets, net

5,532


5,211


4,940

Total Other Assets

141,236


141,879


180,241


$ 1,418,273


$ 1,416,021


$ 1,386,986







LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:






Accounts payable

$ 132,703


$ 106,680


$ 101,595

Accrued liabilities

91,885


94,837


93,592

Current portion of deferred liabilities

21,150


19,760


19,681

Total Current Liabilities

245,738


221,277


214,868







Noncurrent Liabilities:






Deferred liabilities

130,196


129,837


137,437







Stockholders' Equity:






Preferred stock

-


-


-

Common stock

1,722


1,779


1,789

Additional paid-in capital

293,881


282,528


276,000

Retained earnings

746,006


780,212


756,043

Accumulated other comprehensive income

730


388


849

Total Stockholders' Equity

1,042,339


1,064,907


1,034,681


$ 1,418,273


$ 1,416,021


$ 1,386,986


Chico's FAS, Inc.

Consolidated Cash Flow Statements

(Unaudited)

(in thousands)



Twenty-Six Weeks Ended


July 30,

2011


July 31,

2010

CASH FLOWS FROM OPERATING ACTIVITIES:




Net income

$ 89,309


$ 65,856

Adjustments to reconcile net income to net cash

provided by operating activities --

Depreciation and amortization

48,353


46,636

Deferred tax expense (benefit)

4,845


(3,628)

Stock-based compensation expense

8,365


5,950

Excess tax benefit from stock-based compensation

(1,642)


(1,011)

Deferred rent and lease credits

(9,167)


(8,037)

Loss on disposal of property and equipment

1,756


1,813

Decrease (increase) in assets --

Receivables, net

(1,774)


(3,578)

Income tax receivable

(4,738)


(346)

Inventories

(30,931)


(8,382)

Prepaid expenses and other

(5,904)


(2,666)

Increase in liabilities --

Accounts payable

17,417


15,203

Accrued and other deferred liabilities

6,637


2,110

Total adjustments

33,217


44,064

Net cash provided by operating activities

122,526


109,920


CASH FLOWS FROM INVESTING ACTIVITIES:




Decrease (increase) in marketable securities

86,150


(82,884)

Purchases of property and equipment, net

(56,265)


(34,380)

Net cash provided by (used in) investing activities

29,885


(117,264)


CASH FLOWS FROM FINANCING ACTIVITIES:




Proceeds from issuance of common stock

2,762


1,378

Excess tax benefit from stock-based compensation

1,642


1,011

Dividends paid

(17,521)


(14,282)

Repurchase of common stock

(97,880)


(247)

Net cash used in financing activities

(110,997)


(12,140)


Net increase (decrease) in cash and cash equivalents

41,414


(19,484)

CASH AND CASH EQUIVALENTS, Beginning of period

14,695


37,043

CASH AND CASH EQUIVALENTS, End of period

$ 56,109


$ 17,559






Chico's FAS, Inc.

Boutique Count and Square Footage

As of July 30, 2011
































As of


New




As of




4/30/2011


Stores


Closures


7/30/2011



Store count:




















Chico's frontline boutiques

595


4


(1)


598



Chico's outlets

71


6


-


77



WH|BM frontline boutiques

350


8


(2)


356



WH|BM outlets

24


1


-


25



Soma frontline boutiques

134


16


(2)


148



Soma outlets

10


5


(1)


14



Total Chico's FAS, Inc.

1,184


40


(6)


1,218






























Remodels/










Relos and




As of


New




change in


As of


4/30/2011


Stores


Closures


SSF


7/30/2011











Net selling square footage (SSF):




















Chico's frontline boutiques

1,605,751


11,464


(1,120)


3,777


1,619,872

Chico's outlets

185,056


13,450


-


-


198,506

WH|BM frontline boutiques

730,625


16,596


(4,561)


3,114


745,774

WH|BM outlets

46,346


1,892


-


-


48,238

Soma frontline boutiques

273,348


34,112


(4,051)


(677)


302,732

Soma outlets

18,154


9,552


(1,971)


-


25,735

Total Chico's FAS, Inc.

2,859,280


87,066


(11,703)


6,214


2,940,857


SOURCE Chico's FAS, Inc.

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Investor Contact

  • David M. Oliver

  • Senior Vice President, Finance - Controller
  • cfo@chicos.com